Maximising your Golden Years

During our recent radio show on 5AA (every second Thursday at 3pm), we outlined some of the implications of extending work beyond 67 on the Age Pension. The day after purchasing a coffee, I overheard a group of workers discussing the radio show. Whilst it was heartening to hear, the person leading the talk was instructing his companions on the specific course of action they should adopt. Regrettably, his recommendations were based on his own circumstances.

This instance sheds light on a challenge encountered in the realm of financial planning. Although well-meaning friends and family might be inclined to share their insights, it’s essential to acknowledge that the snippets of information and guidance they provide, often prove to be inappropriate when applied to other situations.

While receiving the Age Pension has long been the benchmark for retirement, Australians are redefining this by continuing to work past the age of eligibility (67). There are many reasons for doing this including a positive contribution to mental and emotional well-being, reducing reliance on retirement savings, and financial flexibility through the use of the Work Bonus.

One of the key perks that the Australian government offers to seniors who decide to keep working is the Work Bonus. This initiative aims to encourage and reward pensioners who engage in gainful employment (including employee and self-employed arrangements). The Work Bonus allows eligible pensioners to earn up to a certain amount each fortnight (currently $300 p/f) without affecting their Centrelink pension payments. The earned income is essentially exempt from the pension income assessment, making it a win-win situation for seniors who wish to supplement their pensions through part-time work or other endeavors.

Aside from comprehending the workings of the work bonus, it’s also important for our clients to understand the delicate equilibrium between Centrelink’s income and asset tests. Through careful planning whether an individual or couple, we can assist in pinpointing the threshold at which earned income begins affecting the Age Pension for their situation.

Each person’s retirement is unique, we love working with our clients to not only find the optimal financial outcome but ensuring the right balance is struck for work, income, and leisure during their golden years. 

Financial Planner AFP® | M.FF

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